Make cash illegal to end boom and bust — and liberty

by Chris Powell, GATA.org Dear Friend of GATA and Gold: If commentary published tonight in the London Telegraph is any indication, gold bugs may not be quite as paranoid as their stereotype. The commentary, written by Jim Leaviss of M&G Investments in London, argues that governments could stop the boom and bust of the business cycle if only cash was eliminated and replaced by electronic money. Leaviss says a step toward such a change is already under consideration in Denmark. Leaviss writes: “Once all money exists only in bank accounts — monitored or even directly controlled by the government — the authorities will be able to encourage us to spend more when the economy slows or spend less when it is overheating. … In this futuristic world, all payments are made by contactless card, mobile phone apps, or other electronic means, while notes and coins are abolished. Your current account will no longer be held with a bank, but with the government or the central bank. …” When government wanted people to save, Leaviss writes, it could impose a tax on bank account transactions, and when government wanted people to spend, it could impose negative interest rates, as some governments already have done. “At the moment it’s easy for individuals to avoid seeing their money eroded this way,” Leaviss notes. “They can simply hold banknotes, stored either in a safe or under the proverbial mattress.” (He could have added gold.) “But if notes and coins were abolished and the only way to hold money was through a government-controlled bank, there would be no escape.” Yes, no escape at all. Everyone’s financial transactions would be recorded and monitored, everyone’s finances would be vulnerable to government cutoff at any time, and liberty and privacy would be abolished. That government must never have such power has been the principle underlying the political development of the English-speaking peoples for hundreds of years, from Runnymede by the Thames to Independence Hall in Philadelphia. Yet now nostalgia for the Soviet Politburo and the Nazi Gestapo is being celebrated in what is supposedly the United Kingdom’s leading Conservative newspaper. God save the queen — and the rest of us too. Leaviss’ commentary is headlined “How to End Boom and Bust: Make Cash Illegal” and it’s posted at the Telegraph’s Internet site here: http://www.telegraph.co.uk/finance/personalfinance/comment/11602399/Ban-… CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.